Toll Expressways: From Dearth to Death?

INSIDE MAN

One and half years later, it's all quiet on the infrastructure front.

by Tito F. Hermoso

August 10, 2011 15:27

As tricycles, buses, jeeps, motorcycles and multi-cabs proliferate like rabbits all across our archipelago's National Highways, we will certainly a steep climb in mediocre driving and an even steeper climb in accident fatalities. Mostly of the head-on vehicle-to-vehicle and vehicle-to-illegal road side structure kind, single carriageway highways are inherently dangerous because of the big variance in speeds that the different kinds of motor vehicles travel. This leads to overtaking and no one can deny that overtaking is a science that takes into account the speed of the vehicle you are overtaking, the speed of the approaching vehicle in the opposite direction and, more importantly, how fast your vehicle can accelerate [or brake] to tuck back into your proper lane.

How many of us coming down from North, driving on arduous Highway 3 [MacArthur Highway] release a sigh of relief the moment we see the signs leading to the SCTEx? Yes for those of us who want a saner, more relaxing and less risky driving environment, we can always look forward to being on the safest roads we have; all 250kms of dual carriageway privately run toll expressways. It is a fact that dual carriageway toll expressways, if maintained and operated to world class standards, has the lowest accident and fatality rate per lane kilometer journey. Not only that, whatever idiotic driving methods we see everyday i.e., hogging the overtaking lane, weaving, backing up on the shoulder, abrupt merging on slip roads - can be caught and penalized on the spot, expressways make great ways to teach the motoring public to behave.

Some one and a half years ago, proposals, plans and interest in funding, from both domestic and international sources, for new expressways was at an all time high. The success of the operation SCTEx, NLEx, SFEx and STAR extension to Batangas, plus the impending completion the SLEx, TR3 [better known as the SLEx-STAR link] and Skyway Stage 2 has proved attractive to local conglomerates like Metro Pacific Tollways, San Miguel Infrastructure and PIDCo. along with foreign investors like MTD of Malaysia and Citra of Indonesia.

Hopes were high that a new administration would carry on and improve upon the track record of the past in adding more expressway kilometers. Finally, the infrastructure backlog that accumulated since the debt torn 80's was being addressed. There was no lack of vision.

Metro Pacific Tollways were already designing the Valenzuela-Port Area NLEx link and were looking forward to the government's completion of C-5 linking NLEX-Mindanao Ave. to Luzon Ave. and the MWSS end of Katipunan Ave. A stacked elevated expressway linking NLEx to Skyway Buendia via the PNR right-of-way was being proposed. Expressways for Cebu and Ilioilo were being planned. There were plans for the extension of the NAIA Expressway to link all 4 terminals of the NAIA complex to connect all the way to the Coastal CAVITEx.

Not to be outdone, San Miguel Infrastructure- then into corporate planning by press release -was wisely taking a holistic approach, targeting not only the building of new expressways but also the income of long term operation which attracts funders as compared to a plain construction contract/project. The STAR tollway was given a look-see and San Miguel joined the PIDCo. consortium that was already breaking ground on the TPLEx. It even dared to announce plans to take the expressway beyond Rosario, La Union to Pagudpud, Ilocos Norte. San Miguel also surveyed their options on Ausphil's planned North Luzon East Expressway and LRT-7 that takes off from Commonwealth Ave. to reach Norzagaray in Bulacan.

Despite being victimized by the government indecision on applying the agreed toll rate for the new SLEx and the delayed turnover by the PNCC, MTD still made plans for a scenic expressway that links Saimsim, Laguna on Toll Road 3 to Pagbilao, Quezon.

Citra, while still finishing Skyway Stage 2 were already planning links to C-5, C-6 and the Bulacan-Rizal-Cavite Expressway. BCDA, builders of the SCTEx and their financier, JBIC [Japan Bank for International Cooperation] were still raring to build more expressways to Sta.-Rosa-Dingalan Bay on the Pacific Coast and the Central Luzon-Nueva Ecija-Aurora Expressway.

The commercial viability of Philippine toll expressways also attracted interest from international toll road operators and soft loan funders. As a result, DPWH plans for the Laguna Lakeshore Expressway and the Cavite-Laguna expressway were dusted off and offered for build-operate-transfer packaging to attract financing. Belatedly, local banks found it feasible to finance toll road projects though their 10-year terms pale in comparison to the 20 plus year terms of the ADB [Asian Development Bank] and the 40 years of the JBIC.

Two state of the nation speeches later, what has the new government got to show?

First, the good news. The Skyway Stage 2, SLEX, TR-3 and STAR extension is already benefitting thousands of motorists everyday. Ditto for all those motorists going north via the NLEx and SCTEx. Long suffering residents of Cavite now have a complete Coastal Expressway. TPLEx is already building the Tarlac-Gerona 2-way section, projected to be ready by March 2012. NAIA 3 Expressway has been in operation for one a half years, even if the government hasn't allowed the investors to charge toll.

It's a national habit that with every change of government, the need to review all those proposed projects from the previous administration will always find some justification. But most often, suspicion and speculation becomes a substitute for genuine analysis, which leads to the wrong conclusions. Hence the suspension of many of the previous administration's approved projects.

At any rate, whoever the project proponent is, all infrastructure projects must pass the NEDA's investment coordinating guidelines to determine its impact on economic growth. It also must ensure that the government's debt ceiling is not breached. This is where unsolicited projects become useful when private investors propose to finance, build and operate a toll road while the government's role is to purchase the right of way and allow the private investor a reasonable span of time to recover its investment. With the new government's Public-Private-Partnership, all proposed new toll road projects, including unsolicited proposals had to be vetted again and opened up to rival competing bids. That was the intent, but it ended up dousing cold water on the excited interest of the private sector.

From an abundance of interested funders and visionary projects one and half years ago, we now have hardly one handful; the 4.0km SLEx-Daang Hari Expressway spur, the Cavite-Laguna Expressway and NAIA-Coastal Expressway link. Not even the long delayed and critical MRT-LRT-1 operations contract has been decided.

Considering our infrastructure backlog, it is more surprising that our government agencies do not have a store of plans, no matter if financing by government will always be pie-in-the-sky. Whatever plans that came to fruition in the past decade achieved realization because the Private investors believed in Build-Operate-and-Transfer. In some cases, these unsolicited proposals were even opposed by some government agencies and private vested interests. Yet, the Private sector soldiered on and persevered, despite politicking between Executive, Legislature and Judiciary on toll rates, investment recovery terms and "Swiss" challenges.

With cash strapped governments keeping fiscal budgetary restrain, the private sector should be encouraged to take the lead or even take over government's function of providing expressways by making it worth their while. Private toll road operators always perform better than the government, anywhere else in the world, save for Singapore. What's to stop a cash strapped government from franchising the operation of the whole nation's highways to toll road operators?

One and half years later, it's all quiet on the infrastructure front. Has private sector toll road investors lost interest? Will today's dearth of plans and proposals lead to the second death of infrastructure in the country? Meantime International funders have shifted their gaze to infrastructure projects in India, Brazil and Africa, countries that also suffer bureaucratic muddling. Without private sector zeal for the Philippines, foreign sources of soft loans will also lose interest. Unless this current administration picks up the momentum from where the previous administration left off, we are doomed to relive the nightmare of those horrid Jurassic years in the mid-eighties to the early nineties when not did we had very few new roads, what few roads we had were all broken.